5 Reasons Why Homeowners Do Remodels Without Permits
If you polled 100 people who had recently remodeled a home and asked how many pulled a permit, it would not be unusual or uncommon for 80 percent to 90 percent or more to admit that they had not applied for a permit. Why don’t more homeowners get a permit to remodel? Several reasons.
Remodeling permits can cost too much.
Permits are typically based on the price of the project. When I built a garage, I estimated the cost to be about $6,000, and my permit was very inexpensive, around $100. It is not a good idea to try to build a structure that your neighbors can see without obtaining a permit because your neighbors might report you.
Possible additional and unreasonable requirements.
I’ve never met two city inspectors who agreed on anything. Sometimes, city code is open to interpretation. If a homeowner is planning to remodel a kitchen, for example, city code might require that the homeowner replace an electrical box or make some other type of improvement that could add thousands of dollars to the job. Back to my garage. The city inspector told me to dig a trench 18-inches deep for the electrical. When they came back to inspect the finished job, the second inspector said the trench needed to be 24-feet deep or else I needed to install a shut-off switch in the basement.
Remodeling permits can cause delays.
I could not finish building my garage until the city inspector came out to sign off on the permit. The city was running behind and was backlogged by several weeks. All work came to a halt while we waited. Often, inspectors sign off on work in stages.
Permits are too much trouble to obtain.
True, you have to go down to the city and apply, bring your building plans and get them approved. It’s a hassle for some people. Many homeowners rather would just do the work and forget about a permit.
Homeowners think they won’t get caught.
Out of sight, out of mind, is some people’s motto. They think nobody will ever catch them. But what happens when you decide to get a permit for something else? The city inspector might spot an improvement, check the records and find out there was no permit issued. I’ve known city inspectors who drive down alleys looking for discarded packing materials from home improvement projects.
5 Problems Associated With Remodeling a Home Without a Permit
In defense of pulling house permits for a remodeling job, if you’re flexible with your time and don’t mind spending a few hundred more, it’s generally a good idea to get a permit. And here are some of the problems that could come back to haunt a homeowner who moves forward on a do it yourself project without a permit:
Non-permitted work might not be done correctly or to code.
Just because a homeowner hires a contractor doesn’t mean the contractor will do the job correctly. In addition, there is typically more than one way to do a job, and all three of those could be wrong.
Homeowner’s insurance might not cover a defect for non-permitted remodeling.
If a remodel was done incorrectly and something happens, say a hot wire slips out of a wire nut and a fire breaks out. The damage caused by that fire might not be covered by a homeowner’s insurance policy if the improvement was finished without a permit.
The city might require you to tear it out.
City code often requires that framing be inspected by the city prior to hanging drywall. To determine if studs were installed in a bathroom 16-inches on center, for example, a city inspector might make a homeowner tear out the walls. All the ceramic wall tiles would go with it, too, requiring replacement.
The city might assess penalties.
If a permit seems expensive, wait until you get a bill for the fines and penalties for failure to obtain a permit. The job permit could cost you triple or quadruple the amount of the original permit fee.
A home appraiser might not include an addition in the square footage.
If the appraiser does not include the added square footage in the appraisal, the home will probably appraise for much less. This means a seller might be turned down for a refinance. A buyer might not be able to get a loan to buy the home. Look at this way, if a 10×10 room is not permitted, that’s 100 square feet. At $200 a square foot, you could lose $20,000.
Remodeling without a Permit: What to Do When It’s Time to Sell the Home
You’ve remodeled your home and turned it into your castle, your refuge and your dream home. When you did the remodeling, you used reputable contractors, but because they were friends, family members or other people you knew, no one pulled permits for the work. Now, you’re trying to sell your home and you don’t know what to do.
The best option? Confess.
It’s a Matter of Public Record
If you are working with a real estate agent, he or she will ask you if there is anything to disclose to potential buyers. Remodeling or renovating your home without the proper permits is one of those “problems” that you are required by law to disclose. And if you don’t fess up to the permit-less work, it may be discovered anyway by the title company or by a search of the public housing tax and deed records.
Public records contain the square footage of the home, including particulars like how many bathrooms and bedrooms the home has. If you add on another bathroom or bedroom without a permit, then there is going to be a discrepancy when the title and mortgage companies for the buyer get involved when coordinating the purchase of your home.
The first consequence of your confession is that it may cause an issue with an interested home buyer. The good news is that this is a fixable situation. The fix, however, may require you to confess to your city or county building department. Typically, the building department will charge a small fine for not pulling the permit up-front. The department will then require you to pay the permit fee that you should have paid to begin with, which is typically based on the cost of the remodel.
Renovating a home without permits may have other consequences as well. What if the additional bathroom or bedroom, or other work you did without a permit is damaged in a flood, hurricane or fire? When you make your insurance claim, the insurance company may deny the claim because the work is technically not legal – that room doesn’t exist to them.
If you do sell the home and the buyer finds out later that work was done without pulling a permit, they can also slap you with a lawsuit. And, probably one of the worst consequences of all, although rare, is that the city or county building department may require you to tear down any work completed without a permit, especially if it is not up to code.
If you have done any remodeling, renovations or made additions to your home without pulling a permit, the best thing to do when you get ready to sell is to fess up to everyone. It may cost you some extra money before the sale takes place, but it can save you from lawsuits, additional expenses and further hassle in the long-run.